The Darkmoon Rabbit can be found in a cave on the beach, south east of the Darkmoon Faire grounds. It is a neutral NPC but turn hostile once you tag it.

How to kill it:

Get a small raid of 90s together. (Don't really need tanks, as the rabbit has no agro tables)

Group close to the entrance of the cave. Be careful to not LoS the boss when he targets you, as he easily evade bugs.

He will jump on a random raid members and use HUGE, SHARP TEETH!, fear you, and probably kill you if you have no healers.

If you die, release and run back.

PROFIT?

Everybody in the raid will get the achievement That Rabbit's Dynamite! once the rabbit dies. Though only one person will get pet.

NPC Scan instructions: (courtesy of someone on WoWhead)

Open NPCScan options (type /npcscan)

Go to the search options menu

Type in 58336 in the NPC ID, select Darkmoon Faire in the drop down for World field, Type Darkmoon Rabbit in the name field. Then hit the ( + ) symbol to the right side to add it to your list of NPCs to search for.